Over the past several months, California’s franchised dealers have had to keep pace with federal regulations evolving faster than any one operator can reasonably track. Despite the Fifth Circuit’s decision invalidating its original CARS Rule, the Federal Trade Commission made clear in its March warning letters to 97 dealer groups that the underlying philosophy of that rule, namely that dealer-imposed charges must be included in the advertised price, remains its focus. While much of the guidance in those letters is somewhat nebulous, the overall direction is that dealers must use clear, inclusive total price advertising.
However, the devil is in the details, as the FTC’s practical implementation guidance is at odds with the adopted SB 766, the California CARS Act, which takes effect on Oct. 1 of this year. After considerable debate in Sacramento, the CARS Act permits dealers to itemize certain charges rather than fold the entire transaction into a single advertised total. How are California’s dealers expected to reconcile the two sets of guidelines?
This unpredictable regulatory environment is one of CNCDA’s chief concerns, and we’ve conveyed it both publicly and in ongoing conversations with NADA, the FTC and California regulators. The Commission needs to account for the state-level framework that our members are currently preparing for. In the meantime, this confusion becomes a serious liability for dealers without the staff or resources to monitor these changes to determine how to stay in compliance. This is precisely the work the association does on behalf of our members.
CNCDA has long served as the link between Sacramento, Washington and the dealership floor, translating shifting expectations into practical guidance dealers can follow to effectively run their stores, rather than leaving dealers to guess and hope they comply with new and changing rules. Additionally, CNCDA’s work isn’t finished when a rule is announced. We continue to press for clarification as agencies produce and interpret their own language. When conflicts between state and federal authority surface, we push for practical implementation guidance for your dealerships. No other organization in California is built to do this work for franchised dealers, nor is any solely focused on the success of the franchised-dealer model in the state.
Our members expect CNCDA to remain actively engaged. Our compliance alerts, new forms, webinars and direct dialogue with regulators will continue as these rules evolve. Our team will continue to make the case that California’s dealers deserve a framework that doesn’t require them to decipher between state and federal direction to advertise and sell a vehicle honestly. CNCDA will continue to help regulators define a workable set of rules that lets dealers spend their time doing what they do best: putting Californians into safe, reliable, affordable cars they enjoy driving.
We know the dust on these issues will not settle soon. But every member should know that CNCDA is hard at work to make sure our members are operating with the clarity they are owed as they continue building the success of their businesses.
